Interview with Gurdeep Singh

“We are committed to low cost, low emissions”

NTPC Limited, India’s biggest energy conglomerate, caters to almost 23 per cent of the country’s power demand. The company is looking to increase this share over the next few years, with the addition of 4-5 GW capacity annually. In an interview with Power Line, Gurdeep Singh, chairman and managing director, NTPC Limited, spoke about a range of issues including the company’s coal imports, its ambitious renewable capacity addition plans, acquisition of stressed assets, strategies for emission control norm compliance, and plans for scaling up electric vehicle (EV) charging infrastructure, as well as the overall outlook for the power sector. Excerpts…

What is your assessment of the current state of the power sector? What have been the sector’s biggest achievements in the past one year?

India’s electricity demand is growing at a very high rate of nearly 7 per cent in the current fiscal. With the implementation of the government’s flagship programmes such as the Deendayal Upadhyaya Gram Jyoti Yojana and the Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya) along with its “Make in India” initiative, the demand is poised to increase significantly in the future. Further, the government’s Ujwal Discom Assurance Yojana has started showing results and discoms are becoming profitable, which is a good sign for the sector.

In some of the biggest achievements of the sector during the past year, the country’s peak demand crossed the 175 GW mark in September 2018, while the contribution of renewable energy reached 20 per cent. For the first time, renewable addition was more than the thermal capacity addition in the last fiscal. All villages have been electrified and significant progress has been made towards connecting all households. The government’s IPDS scheme, aimed at reducing the aggregate technical and commercial losses, has also shown very encouraging results.

What, according to you, are the biggest issues and concerns for the sector? What is your outlook for power demand in the short to medium term?

Coal availability and railway infrastructure for coal transportation are the biggest concerns as of now. Though coal despatches have increased, the power demand has grown more rapidly. The average daily demand is higher than the last year. As the monsoon season is over and wind availability has reduced, the onus to meet the demand is on coal-based generators.

What were the significant growth and performance highlights for NTPC during the past year?

The company had a great year of performance. In FY18, profit after tax grew by 10.21 per cent (Rs 103.43 billion) and revenue grew by 6.6 per cent (Rs 834.53 billion). The company realised 100 per cent of the billed amount (Rs 852.64 billion) for the fifteenth year in a row.

The plant load factor (PLF) of coal stations was 15 per cent higher than the national PLF of coal stations. Six stations of NTPC figured in the list of the country’s top 10 stations in terms of PLF. NTPC added 4,423 MW of commercial capacity during the year, and it is the second highest commercial capacity ever added in any year.

The generation growth was over 6 per cent, much higher than the national average. Significant progress was made in coal mining, with 2.68 million metric tonnes of coal produced from the Pakri Barwadih mine and coal production started at the second mine in Dulanga.

What is NTPC’s project pipeline for the next two to three years? What will be the share of renewables in the planned addition?

With 20 GW of capacity under construction, we will add around 4-5 GW of commercial capacity each year for the next few years. By 2032, NTPC hopes to have over 30 GW of renewable capacity. This could be through the engineering, procurement and construction (EPC) mode or developer mode. Recently, tenders have been issued for 2 GW of solar and 1.2 GW of wind capacity under developer mode and have received competitive pricing even with safeguard duty.

The government has recently issued a policy on “Flexibility in Generation and Scheduling of Thermal Power stations to Reduce Emissions”, which does not require additional power purchase agreements (PPAs). This will help in faster addition of renewable capacity.

What are NTPC’s stressed asset acquisition plans? What are its plans to participate in government initiatives for the revival of stressed assets?

We are keenly looking at the developments. There are some assets that are good. If they are coming through the National Company Law Tribunal, we will be happy to look at it. In any case, we have offered to provide operations and maintenance services to assets acquired by lenders.

How is NTPC progressing in terms of meeting the new emission control norms?

We are geared up for retrofitting our plants to meet the new emission norms. Action has been taken for meeting the De-SOx, De-NOx and particulate matter limits. Our first flue gas desulphurisation system became operational at Vindhaychal (500 MW) and work is in progress at 17 GW of capacity. Tenders have also been floated for 15 GW of capacity for combustion modification to meet the NOx limits. Retrofitting of electrostatic precipitators is also in progress. We are expediting the award of contracts for the entire coal-based capacity so that all units are compliant with the norms within the deadlines given by government agencies.

What are NTPC’s plans with regard to operating its gas-based plants as peaking plants?

The total gas capacity of NTPC is contracted through PPAs. To use these plants as peaking plants, necessary regulations/policies have to be in place.

What are the company’s domestic and imported coal requirements for the next one to two years? What is the output target for the company’s coal mines?

The coal requirement for the current fiscal is approximately 220 mt including the requirement of units planned for commercialisation this year. With the expected commercialisation plan of around 4-5 GW per year, the requirement will further increase. We are not so keen to import coal due to the high prices. However, two tenders of 2.5 mt each have been floated recently to address the coal shortage problem. The production target from our own mines for FY19 is 7.2 mt.

What are NTPC’s plans for the EV charging infrastructure segment?

NTPC is working on the concept of “infrastructure first” and moving towards setting up charging stations. It has signed MoUs with the Jabalpur, Bhopal and Navi Mumbai municipal corporations. It has also floated tenders for procuring charging stations and will soon set up a station at Navi Mumbai. We are also in discussions with the city administration of Bhubaneswar, Guwahati and Goa for providing complete e-mobility solutions. MoUs have also been signed with Hindustan Petroleum Corporation Limited and Indian Oil Corporation Limited for setting up charging stations at their outlets. We are also exploring providing last mile connectivity with the Delhi Metro Rail Corporation.

What is your outlook for the power sector for the next few years and NTPC’s role in it?

The increase in the country’s GDP is greatly supported by the power sector. As per our expectation, the power demand would grow by 7-8 per cent in the days to come.

Currently, we are meeting 23 per cent of the country’s demand through 15.5 per cent of capacity. We are working towards increasing our share. Even though the landed cost of coal has increased by 45 per cent in the past five years, the average tariff billed to customers has decreased during this period. We are committed to keeping the energy charges rate low by optimising fuel linkages and enhancing operational efficiencies. We are committed to “low cost low emissions”.